Homeowner Loans - a Preferential Treatment

By: Aisha Cristal

Do you want low cost loans that are easily available in the financial market? Well, it is quite possible if you are a homeowner. All you are required to do is to pledge your home with the lender and get a hefty loan amount. The rate of interest starts from 6.5 percent and goes on increasing as per your individual circumstances. The rate is high if you have a bad credit history.

The primary concern of any lender is to get back his money along with interest. With this objective, some lenders require you to put your home as a security against the loan amount. Such loans are called homeowner loans since only the homeowners can fulfil this condition. In return, the lenders give such borrowers a preferential treatment. Homeowners are given preference over tenants especially when it comes to applicable rate of interest and flexibility in repayment.

Homeowner loans are suitable if your financial requirement is big. Tenants won't be able to get higher amounts as loan but homeowners can get up to ?250,000. Similarly, homeowners get flexibility in repayment terms as well. The repayment period in case of homeowner loans stretches up to 25 years. However, a longer repayment period also means that you will have to pay larger amount of interest.

The current property market in the UK also confers some benefits on the homeowners. The prices in the home segment have increased by three times in the last one decade. Obviously, it means more equity available to an average homeowner. The higher the equity in your home, the higher will be the loan amount that you are eligible to get. This is precisely the reason why homeowner loans can be a source of big funds. Normally, you can get up to 80 per cent of the equity in your home as loan. Some lenders may allow you more depending upon your individual circumstances and their own policies.

Home Loans
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